According to an annual forecast of top policy issues facing state legislatures, budget gaps and revenue shortfalls will continue its three-year reign atop the docket. The National Conference of State Legislatures’ says the states’ fiscal problems are “enormous, appalling and, unfortunately, at least two years away from being over.”
In 2009, states cut or scaled back programs, increased taxes and implemented hiring freezes to close a cumulative budget gap of $145.9 billion. Early indications point to continued cuts as thirty-six states already report budget shortfalls heading into the second half of the fiscal year. NCSL numbers indicate that since most states enacted their FY2010 budgets in July, gaps of $28.2 billion for those thirty-six states have emerged.
“Everyone is going to have to get their hands dirty while trying to find successful solutions to closing state budget gaps,” William Pound, NCSL executive director said in a statement accompanying the forecast.
Health care costs, unemployment, higher education and sentencing/corrections cost concerns round out the top five issues on the NCSL list.
- Programs such as Medicaid, SCHIP and health insurance will be dominant issues in 2010, the report predicted, while chronic disease prevention and public health preparedness compete for scare dollars.
- National unemployment rates are expected to increase through the first half of 2010, and state economies will likely lag beyond any national turnaround. According to the federal government 24 states and the U.S. Virgin Islands are borrowing to cover employment benefits. States may look to cut benefits and restrict eligibility in 2010, NCSL predicted. According to the Washington-based Center for Budget and Policy Priorities, as states try to eliminate deficits, the U.S. economy could shed 900,000 jobs.
- Some states are beginning to ponder “privatized” systems of higher education, as tuition increases keep many students from obtaining degrees. Federal officials have pushed to double the number of college graduates by 2020, but to do this, higher education may depend on K-12 reform to take on more of the innovative burden.
- Habitual overcrowding in prison systems have been a drain on state coffers for many years and in 2009, at least twelve states eliminated or decreased prison sentences for theft or drug offences, NCSL found. Balancing public safety and recidivism costs will be a major issue next year, as states wrestle with NIMBY and practicality.
Other issues of common concern in 2010 include maintaining road and water infrastructure, investments in streamlining state government operations, clean energy alternatives, broadband, and DNA technologies.
Adding fuel to the legislative fire is that 2010 promises to see heavy traffic on the campaign trail. Eighty-three percent of legislative seats are up for re-election, NCSL officials said, making tough decisions and consensus all the more difficult. This election cycle will “set up the power grid for who controls the 2011 redistricting process, making it arguably the most important year for legislative elections in the decade,” the forecast said.